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Alphabet announces $80B equity capital raise to expand AI infra and compute

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Re: Alphabet announces $80B equity capital raise to expand AI infra and compute

#161

Post by pineapple_opus »

lemax wrote: post #65
mitchell_h wrote: post #23

Earlier quoted context omitted.

I use anthropic's models daily, and sometimes switch to Gemini. Google is losing the marketing front BADLY, but their AI service is surprisingly great. It's far cheaper than anthropic for one. and for my kind of research it's just better.

I'm quite certain that Google's AI services are likely the most used in the world right now by virtue of having the widest distribution. It's in the search box. It's on your Android phone. Just because they aren't the preferred coding or research agent does not mean they are losing - that's a pretty small slice.

Yeah this seems true. Claude Code are famously dubbed as best AI coding agent, but google doesn't care about that niche I guess. Somehow, I still rely on google search as they have diversified it.

If you ask questions, it will enable "AI overview" , but if we search about particular object/platform like "Google stock" or "bbc news", it will give the old classic search experience and we woulnd't need to swallow "AI overview" pill in that case.

Re: Alphabet announces $80B equity capital raise to expand AI infra and compute

#162

Post by lnenad »

sethops1 wrote: post #124
panarky wrote: post #97

Earlier quoted context omitted.

It's also interesting watching Alphabet buy back $100 billion of stock over the last two years, when the price was half what it is today, only to turn around and sell shares now at the higher price. I know GAAP accounting won't recognize any capital gain on these treasury operations, but from an economic standpoint this financial judo creates a lot of value for existing shareholders.

"Buy low, sell high" isn't exactly financial manipulation.

I think the point OP was trying to make is when a person "buys low sells high" they pay taxes on the gains.

Re: Alphabet announces $80B equity capital raise to expand AI infra and compute

#163

Post by riffraff »

topkai22 wrote: post #116
an0malous wrote: post #100

Earlier quoted context omitted.

Especially because LLMs have no moat and they’re strategy is basically “we’ll figure out AGI first”

I feel there is a strong argument that if we described the capabilities of agentic systems today to someone from 2002, they’d say we’ve achieved AGI. It’s just not as impressive as we thought it would be. At least not yet.

indeed, I know this is not actually AGI, I know it hallucinates and it's not reliable in all situations, buy any of today's LLMs would appear magical to anyone from 20 years ago.

Re: Alphabet announces $80B equity capital raise to expand AI infra and compute

#164

Post by bandrami »

exabrial wrote: post #133
missedthecue wrote: post #128

Earlier quoted context omitted.

If they can issue shares at ~30x earnings and deploy it in an accretive way, what is the argument against doing this? It's incremental ROIC below your cost of capital. One of the smartest things you can do in business.

But why finance it at all if you have (I assume) the cash laying around? That seems a tad risky if the bet doesn't work out. Not nitpicking your answer, I just don't understand.

You sell equity now if you think equity is going to be worth less in the future

Re: Alphabet announces $80B equity capital raise to expand AI infra and compute

#165

Post by bandrami »

mbesto wrote: post #102
onlyrealcuzzo wrote: post #84

Earlier quoted context omitted.

I don't understand where this $80B, +$150B for SpaceX, +$??B for each Anthropic and OpenAI is going to come from. There's not that much cash sitting around. Something is gonna need to get sold to transfer into those assets. Unless central banks are just going to print money to invest in these companies, I don't know who else is going to be able to take on enough debt to prevent massive sell offs somewhere for this. I…

(1) There is currently $1T in dry powder in private capital markets (2) Middle east oil money (Saudi Aramco's profit every year is $100B+) (3) Public traders have been and are looking to cycle out of other investments into higher growth areas.

Oh hey, so about that Gulf oil money...

Re: Alphabet announces $80B equity capital raise to expand AI infra and compute

#167

Post by dnnddidiej »

asdfaoeu wrote: post #147
B-Con wrote: post #104

Earlier quoted context omitted.

They added $80 out of a $4.5T market cap, which means redistributing ~1.67% of value from shares outstanding to the new shares. So being down 1.7% is literally exactly what you'd expect.

Not at all since the company is also +80bn cash.

But they are about to set it on fire?

But null hypothesis p=0.3 or something right?

Re: Alphabet announces $80B equity capital raise to expand AI infra and compute

#168

Post by thefounder »

marcus_holmes wrote: post #136
wrsh07 wrote: post #130

Earlier quoted context omitted.

This is a sensible-seeming take at first blush, but it doesn't hold up to any scrutiny (or maybe my scrutiny is faulty - you tell me!) Sundar and many of his executives have certainly read or heard of The Innovator's Dilemma, and I expect they're all moderately paranoid that it will be their downfall. Also, that's not it. Google has a great ai app called Gemini where they have at various points hosted the top ai imag…

I heard Google search volumes by humans were declining, but I can't find the reference now so may be wrong. It's definitely changing the entire SEO industry. Are they actually implementing ads in chat yet? I haven't seen an ad in Gemini yet. Again, the results I've seen is that LLM results in search have resulted in more zero-click searches (as a proportion of all searches), which isn't increasing engagement? But aga…

Even if they include ads in Gemini the issue is that Gemini is not the best AI app. It’s maybe the 3rd or 4th. So if Google becomes the 3rd best “search/AI engine” the future is not that bright.

Re: Alphabet announces $80B equity capital raise to expand AI infra and compute

#169

Post by Saline9515 »

marcus_holmes wrote: post #119
bel8 wrote: post #17

Earlier quoted context omitted.

They know Google has a ton of data to train LLMs on. Recently I have been asking YouTube's new AI about some videos ("when is Steam metrics mentioned in the video?" for example), which means they also index videos. This is an unthinkable amount of data. I'm actually impressed at how bad Alphabet is with LLMs since they invented the thing as we know AND have all the data to train on, yet OpenAI and Anthropic are eatin…

Kodak problem. Kodak invented the digital camera but their revenue came from making photographic film. They were unable to take advantage of their invention because it would cannibalise their revenue. That didn't stop other people and the revenue died anyway. Google's main revenue is ads based on search. LLMs are a competitor to search. Creating better LLMs will cut into search volumes. In any large organisation this…

LLMs still need a search API, and use it a lot.

Google is well positioned to earn from this service, especially if they can prove that their search service is superior to competitors. While they lose some of their moat, they are well positioned to dominate the market, just like they did in the consumer space.

Re: Alphabet announces $80B equity capital raise to expand AI infra and compute

#170

Post by dsl »

impulser_ wrote: post #86
afavour wrote: post #69

It’s difficult to avoid the feeling that a horrible financial reckoning is on the way. All these big tech firms are spending wildly to make sure they are the one on top at the end of it all. But whoever that ends up being there’s going to be one hell of a lot of fallout underneath them.

Yeah, but Google has the money for this. They are quite literally the most profitable company in the world. They are only raising because they don't want to harm there other businesses buy eating up their capital for this. Why do you think there will only be one winner?

> Yeah, but Google has the money for this. They are quite literally the most profitable company in the world.

"Alphabet announced that its 2026 capital expenditures are expected to be $180-$190 billion, and that it expects 2027 capital expenditures to significantly increase [...] over the 12 months ended March 31, 2026, Alphabet generated $174 billion of operating cash flow"

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